Being Proactive is Essential to Solving Issues
Due to a variety of factors, supply chain challenges have increased dramatically for production facilities and manufacturers across the entire world. With seemingly every company struggling to find what they need, and production lines and supply chains already stressed beyond their comfort points, short-term goals for the remainder of 2021 will predominantly center around acquiring the parts and materials needed to make a business work.
We’ll dive into specific issues affecting the supply chain, and the effects associated with them, in a bit. But first, it’s important to realize that the current strain on the system isn’t expected to be alleviated soon. Attacking the challenges with proactive solutions, and communicating and collaborating with trusted supply partners, will be essential for businesses from across the spectrum in dealing with the current environment. Acting now may improve some Q3 2021 supply issues, but the primary benefits will come further down the line — in Q4 or Q1 2022.
Supply Chain Challenges on Every Side
The biggest factor impacting the supply chain in 2021 is the same one that supply managers have been wrestling with for all of 2020 — keeping operations on track as the world deals with the COVID-19 pandemic and all of the related disruptions. For example, a strong vaccination roll-out program in the United States has led to a feeling of ‘returning to normalcy’ across virtually all industries. But, in other countries that success has not yet been felt. Outbreaks are still leading to shutdowns in some parts of the world, including in production and manufacturing facilities, which in turn lead to additional supply shortfalls or logistic problems.
The onset of the pandemic in 2020 led to many facilities slowing down or shuttering production lines. However, demand for many products remained at the same level or increased. It’s led to production struggling to catch up and meet those demands since. Production lines are full, there’s a backlog for many materials and parts, and any further delay or disruption is magnified as a result.
Material shortages have been problematic for many products. In an obvious example, the February storms that ravaged Texas and the Gulf Coast resulted in critical supply shortages for many poly-related products. Such disruptions interrupted, completely, an already strained supply chain and exacerbated the delays for fabricators, suppliers, and manufacturers of all related products.
As production, across the globe, labors to catch up with demand while negotiating with the impacts of pandemic regulations and delays — and material shortages — it’s been slowed by the logistical issues common across many sectors. Shipping ports are full and/or overwhelmed. Backlogs of orders sit, waiting to be processed through customs. Warehouses are empty due to bottlenecks at other points in the supply chain.
The confluence of these factors has affected vendors in obvious and negative ways. Vendor lead times have risen exponentially due to these supply chain challenges. What was once maybe a four or six-week lead time for a specific part or order has transformed into a wait of two or three times that length. In this example, that’s now 12 to 16 weeks.
As stated earlier, these issues will not be resolved overnight. While the impact of supply chain delays is certainly being felt in the here and now, they’re also likely to persist throughout the rest of 2021. As supply chain managers search for ways to make their processes more resilient and flexible — such as negotiating away from single-source suppliers — vendors will need to act quickly to address these issues in time for Q4 2021, or Q1 2022 orders.
Fortify Against Supply Chain Challenges
As a vendor, there are some steps you can take to address these issues and better position your organization to meet these challenges. Unpredictability has been the biggest defining trait of managing supply chain challenges for most of the last two years. However, with services from a trusted supplier — such as Marco Rubber & Plastics — you can mitigate against the unexpected.
Let’s examine some of the vendor-centered options available to add resiliency to your supply operations.
Blanket Orders
Many organizations opted for lean supply chain operations before the pandemic — giving up resilience and flexibility for efficiency. Now many are re-examining that choice. Finding ways to generate safety stock is now seen as a beneficial strategy, and one way to do so is working with suppliers with blanket orders.
Blanket orders are usually developed with consistent, repeat customers with a good working history with suppliers or vendors. They typically come with predefined ship dates and allow both parties to better schedule what parts will be needed and when to send them.
Marco Rubber & Plastics will offer flexibility in blanket orders as well. We have the capability to either schedule regular shipments — an auto-filled order that goes out each month — or arrange a large order of parts that can be held until needed by the buyer.
Alternative Products
Another way to alleviate supply chain issues with a specific product, part, or material is to investigate alternatives that can serve the same purpose, but may be more readily available (or available at a better price point). For example, at Marco Rubber & Plastics, our engineering group can examine the requirements of the part needed for your application and then offer alternatives that will meet those requirements.
Here’s a real-world example. Perfluoroelastomer (FFKM) is a high-performance sealing material often needed for specific applications where the material’s heat and chemical resistance, and near-universal chemical compatibility, are required. Among all FFKM brands, Kalrez® is the most recognized and requested, but it’s also currently difficult to obtain. By consulting with engineers who know the specifics needed by the application, Marco’s team can recommend Markez® — Marco’s own proprietary FFKM — when warranted as an available replacement at a lower price point.
Finding alternatives to hard-to-source materials and parts will be critical to easing some of the constraints in place given the current state of the supply chain.
Stocking Programs
As a vendor or retailer, developing a full partnership with a supplier can add security against supply chain disruptions. These partnerships can be augmented with a Vendor Managed Inventory (VMI) program.
VMI programs are a supply chain agreement where a supplier (or vendor) will manage, maintain, and optimize their inventory while it’s in the possession of a buyer. Essentially, inventory is replaced for the buyer or retailer without them initiating a purchase order. The buyer shares inventory data with a vendor or supplier, and then that provider determines how often, and how much, to send a particular product to a buyer.
Successful VMI outcomes will be determined by suppliers knowing when to replenish a partner’s inventory. That means communication and sharing information will be key for both sides. With current sales data from the buyer, and demand forecasting information from the other side, both can avoid overstock, understock, and wasted inventory.
Marco Rubber & Plastics is proud to implement VMI programs with previous, regionally proximate buyers. Connect with us to learn more about how we can institute such a program with you.
Make Marco Rubber Your Supply Chain Partner
With more than 40 years of experience in providing custom sealing solutions, Marco Rubber & Plastics goes beyond the limits of catalog commodities. With the world’s most extensive inventory and production network, we’re positioned to help you meet the supply chain challenges of today and tomorrow.
Our inventory of specialty and standard sealing solutions is backed by best-in-class technology, service, and support. With more than 14,000 repeat customers, Marco Rubber has proven capable of providing the materials, parts, and service to help you seal your success.
We’re here to help. In an unpredictable world, our expertise and experience can provide some much-needed stability and dependability. Our application engineers and material experts can guide you to custom formulations for your specific needs, or find alternative products that may be more readily available. Our relentless commitment to customer service means we’ll work with you, through blanket orders or VMI programs, for example, to answer the challenges of the current environment.
Seal Your Success with Marco Rubber & Plastics
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